Cryptocurrencies Meets Retirement Investing – What You Need to Know

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Cryptocurrencies – digital currencies that are transparent and free from government interference, running on secure blockchain technology are growing in popularity. In investment circles, and the wider sphere of financial services overall, cryptocurrencies still face a lot of skepticism and prejudice, fueled by regulatory uncertainty, volatility and in some cases, the perception of bloated valuations.

However, with each passing day it’s getting harder to ignore the growing popularity of cryptocurrencies, and over the next several years we expect more retirement investors to begin dipping their toes in these unchartered investment waters. According to a recent survey of more than 500 people in the U.S. ages 18 to 44, six percent of savers say they would consider using cryptocurrencies as an investment option for their retirement plan, while fourteen percent said they were unsure. As an investor, chances are you’re going to be asked about cryptocurrencies over the next few years. What are some things you need to be thinking about?


Trust that one’s advisor understands cryptocurrencies, and can offer sound advice when it comes to building them into one’s portfolio, is going to be essential. In order to establish trust, investors will likely expect access to advanced analytics providing reliable risk analysis, projections and risk/return metrics tailored to cryptocurrencies.

Advisory services offering a mix of robo advisory (which can calculate appropriate investments based on individual investors’ risk tolerance and time horizons) as well as human advisors for personal consultation, is likely the ideal mix. Although robo-advisors offer many perks, those closer to retirement age – Baby Boomers and Gen X’ers – may prefer those innate abilities that only human advisors can provide, including asking tough questions, understanding goals and coming up with creative solutions on how to best incorporate cryptocurrencies into retirement plans.


Given the overall lack of cryptocurrency familiarity, those choosing to incorporate may welcome “self-directed” account capabilities that allow them to drop in cryptocurrencies as often as they can or want to.  This “portal-like” functionality can ultimately help increase investors’ comfort levels and confidence.

Investors should have the option to keep self-directed accounts separate from other traditional, non-alternative investments accounts. On the other hand, some may prefer the ability to visually aggregate all assets, including traditional 401Ks, IRAs, stocks and bonds as well as wallets for cryptocurrencies from one centralized platform, supporting more holistic analytics and well-rounded, balanced decisions for the entire portfolio.

Supporting Technology

Greater cryptocurrency acceptance in retirement planning will, in large part, be a function of technology maturation, and this is an evolving area. Ultimately investors will want tools enabling them to directly and easily and trade cryptocoins, as well exchange cryptocoins for fiat currency or other non-tokenized assets within their portfolios, all while maintaining full transparency, automation and record-keeping.

This technology maturation will likely have the impact of increasing cryptocurrencies’ values, as they make this currency type more mainstream and increase accessibility. In essence, more retirement investment platforms supporting the technological aspects of cryptocurrency trading and portfolio integration may very well have the inadvertent (though welcome) impact of increasing crypto-related gains for early adopters.


In general, retirement savers are not saving enough, with their initiatives facing growing pressures from education, healthcare, housing and other costs.  We expect traditional vehicles including stocks, bonds and money-market funds to be the staple of retirement planning for years to come. Some investors may not be ready (or willing) to assume the risk associated with alternative investments like crytocurrencies, but others will. The emergence of asset-based cryptocurrencies – a class that is backed by assets like fiat currency or even real estate, sometimes called “stablecoins” – are one factor helping overcome investors’ general fear and distrust, and fostering wider acceptance.

Whatever your stance may be on cryptocurrencies, they are an exciting opportunity and as the years progress, more investors will likely want to sample. The ability to establish and build trust, give investors more direct control and leverage technology advances will be the key as the entire financial system ecosystem, particularly financial advisors and retirement planners, navigate this new frontier.